An Approach for Sponsored Search Auctions Based on the Coalitional Game Theory

Sponsored search auctions play a crucial role in the Internet advertising. By considering the mutual interactions among advertisers in sponsored search auctions, we propose a game-theory based method for advertisers cooperating with each other in a sponsored search auction. First, we propose a cooperation bid strategy for advertisers' coalition, which could make the utility of the coalition increased and be obtained in linear time. Then, we prove the coalitional game of advertisers has a non-empty core containing the Shapley value. Following, we use an approximate Shapley value to distribute the coalition's utility among advertisers in the coalition. Experiments results verify the efficiency and effectiveness of our method.